You’ve probably heard that you should have a budget. After all, a budget can help keep your spending in check and give every dollar a job.
While some swear by budgeting and can’t live without it, others (like me) are more like to swear at their budget.
I’ve tried the budgeting thing, in earnest. Time after time, I just felt frustrated by the process. Not only that, but quite frankly, I was just bored.
Being caught up in the minutiae of my daily expenditures felt like being on a diet where I counted every calorie, which quickly lost its luster.
Luckily, I’ve adopted a system that works for me and helps me continue to reach my financial goals. If you’re bored to tears with budgeting and just can’t make it work for you, here’s how to manage money wisely without a budget.
1. Know Your Income and Expenses
This first step may seem a bit deceptive as it’s also traditionally used when you create a budget. However, with or without a budget, it’s a good idea to know your income and expenses.
Knowing your income should be a fairly simple process. Simply look at your paystubs to see how much you are bringing home each month. If you’re a freelancer, it’s a little harder, but calculate and project your work from recurring clients and use this as your baseline.
It’s crucial that you know your income after taxes, deductions, etc. You may think you make $4,000 each month (and spending appropriately), but in actuality, perhaps you are only bringing home $3,200.
Once you know your income, take a look at your expenses. Add up your basic expenses like rent, groceries, car payment, student loans, etc. You can do this manually in a spreadsheet or use a tool like Mint for help.
Now, look at the numbers side by side. Do you spend less than you earn? If so, you’re in the clear for this step and ready to move on to Step 2. If you are spending more than you earn, then you should look for areas where you can cut back or find more affordable options.
While this first part may seem similar to starting a budget, it ends here. You don’t have to feel like you are forcing made up numbers into a specific category, then feeling relentless guilt that you went over these details.
The most important rule to follow when figuring out how to manage money wisely is to spend less than you earn.
2. Make Your Financial Goals a Priority
Using my system of non-budgeting, I pay my basic bills first, which include rent, healthcare, utilities and food. After that, I save 10 percent of all my income automatically, so I don’t even have to think about it.
What always frustrated me about budgeting was all the decisions I had to make. I don’t like to make decisions about every little thing and would rather spend my energy and time elsewhere. Therefore, I like to automate my budget as much as possible.
After accounting for my basic bills and savings, I put a large chunk of my remaining income to paying off my debt. Once I’ve covered all my financial bases, I don’t really worry about the rest. I spend as I please and don’t stress over my finances.
I spend on my values and have never once overdrafted my account. So, why does this form of non-budgeting work?
Because it puts your financial goals ahead of everything else. The main purpose of having a budget is to help you stay in line, in order to reach your financial goals. But you don’t actually need a detailed budget (gasp!) to do this.
If you automate your financial goals and cover your bases, who cares whether you spend $10 on coffee this week or $25.67 on going out next week?
3. Try These Three Things
Are you sick and tired of budgeting? Do you feel like you are failing miserably? Here are the three basic things you need to do to make non-budgeting work:
1. Automate your savings. To get started, you can save a percentage of your income for your emergency fund, short-term goals (like travel), and long-term goals like retirement. Automation works because it does all the hard work for you.
Let’s face it, we’re emotional creatures that are good at making excuses. Through automating your savings, you can eliminate any mental and emotional decisions and put your goals at the forefront of your life.
2. Spend mindfully. Just because you don’t have an official budget, doesn’t mean you give yourself free license to buy ALL THE THINGS. Spend on your values and know the difference between your needs and your wants. Be cautious with your spending, but not overly analytical.
3. Do regular check-ins. Some pro-budgeters may wonder how in the world you will ever keep a balanced bank account. But you’ll be able to get by just fine with some light, regular check-ins. Just check your bank account balance first thing in the morning. It takes all of 2 minutes and you’ll be set for the day.
As long as you monitor your bank account regularly to see how you are doing, you’ll be good. Something that may also help is to put bill due dates in your Google calendar and create reminders. This will help you not to worry about forgetting to pay your bills or wondering when a bill will come due.
These three steps can help you learn how to manage money wisely, without a budget. These steps essentially streamline the process for you, so that you can accomplish your goals, save for the future, pay your bills, and spend freely on the things you want, guilt-free — all without the burden of being buried in numbers.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|